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Zimbabwe groans under world's highest inflation
rate

Reuters

Sat Apr 8, 2006 9:34 PM IST

By Cris Chinaka

HARARE
(Reuters) - Zimbabweans woke up on Saturday to news of an inflation figure
that confirmed life in a country already on its knees is getting
worse.

The cost of bread rose by 60 percent overnight after the
southern African country's official statistics agency announced that the
annual inflation rate -- already the highest in the world -- was heading
towards 1,000 percent.

Zimbabwe's main state media tucked the bad
news in the middle of bulletins dominated by what critics call "useless
speeches" by President Robert Mugabe's government officials.

But the
new 913.6 percent inflation rate still announced itself loudly on the
streets of Harare where survival remains a challenge even to citizens well
practiced in the art.

Like the rest of her compatriots, Shamiso Mapanga
said she has learned to live one day at a time.

The 38-year-old
assistant accountant and her teacher husband have long stopped trying to
calculate how much money their family of four needs for groceries every
month.

"It is an impossible and extremely stressful exercise," she said
at a Harare supermarket on Saturday where she was forced to leave behind one
of the three loaves of bread she wanted to buy because the price had risen
to Z$95,000 ($0.958) from Z$60,000 overnight.

"I am sick to the bone
with all these things," she said to a Reuters correspondent in the same
shop.

"ONLY GOD KNOWS"

"How are we expected to survive, and how
long is this going to last?," she asked angrily, and without pausing for a
reply, answered her own question: "I think only God knows how it will all
end."

A man in the same queue said despairingly: "For me whatever
happens. I am going with the flow but at the same time praying that we
survive the tide."

The Consumer Council of Zimbabwe says an average
family of five requires at least 35 million Zimbabwe dollars every month but
an average middle class citizen earns 15 million Zimbabwe
dollars.

Political and economic analysts say many urban Zimbabweans have
so far survived the country's long-running economic crisis through wheeling
and dealing and through subsidies from relatives abroad who send money for
groceries.

A recent study by economists at Harare's University of
Zimbabwe says 90 percent of urban families are spending most of their income
on food and accommodation in the face of the galloping inflation
rate.

Aid agencies have also helped ease the crisis in rural Zimbabwe.
But many people have simply left the country.

Regional officials
estimate up to 2 million Zimbabweans have sought economic refuge in
neighbouring South Africa in the face the crisis, which Mugabe's critics say
has forced a quarter of the country's 12 million people abroad.

Mugabe's
government has branded inflation and corruption as arch-enemies in its war
to revive an economy which has shrunk by an estimated 40 percent in the last
seven years.

THREAT OF REVOLT

The crisis has left Zimbabwe
battling chronic shortages of food, fuel and foreign currency, a crumbling
infrastructure and poor medical services.

The World Health Organisation
said in a report on Friday that life in Zimbabwe is shorter than anywhere
else in the world, with neither men nor women expected to live to 40 because
of the affects of AIDS and poverty on the population.

The opposition
-- along many other critics -- blames the deepening economic crisis on
Mugabe's policies and expects the public to explode in an angry revolt
soon.

Mugabe, 82 and in power since independence from Britain in 1980,
has used tough security laws to clamp down on protests.

Last week
Mugabe warned opposition leader Morgan Tsvangirai that he would be "dicing
with death" if he tries to drive him out of power through mass
demonstrations.

Zimbabwe statistics paint bleak picture

Zimbabweans are struggling to
survive with the world's highest inflation rate and shortest life
expectancy.

The country woke on Saturday to news of an overnight
price rise that left bread 60% more expensive than the previous
day.

The southern African country's official statistics agency announced
that the annual inflation rate - already the highest in the world - was
heading towards 1000%.

Zimbabwe's main state media tucked the bad
news in the middle of bulletins dominated by what critics call "useless
speeches" by officials from the government of Robert Mugabe, the
president.

But the new 913.6% inflation rate still announced itself
loudly on the streets of Harare where survival remains a challenge even to
citizens well practiced in the art.

Survive the tide

Like the
rest of her compatriots, Shamiso Mapanga said she has learned to live one
day at a time.

The 38-year-old assistant accountant and her teacher
husband have long stopped trying to calculate how much money their family of
four needs for groceries every month.

"It is an impossible and
extremely stressful exercise," she said at a Harare supermarket on Saturday
where she was forced to leave behind one of the three loaves of bread she
wanted to buy because the price had risen to Z$95,000 ($0.958) from Z$60,000
overnight.

"I am sick to the bone with all these things," she
said.

"How are we expected to survive, and how long is this going to
last? I think only God knows how it will all end."

A man in the same
queue said: "I am going with the flow but at the same time praying that we
survive the tide."

Economic crisis

The Consumer Council of
Zimbabwe says an average family of five needs at least Z$35 million every
month, but an average middle class citizen earns Z$15
million.

Political and economic analysts say many urban Zimbabweans have
so far survived the country's long-running economic crisis through wheeling
and dealing and through subsidies from relatives abroad who send money for
groceries.

A recent study by economists at Harare's
University of Zimbabwe says 90% of urban families are spending most of their
income on food and accommodation in the face of the galloping inflation
rate.

Aid agencies have also helped ease the crisis in rural Zimbabwe.
But many people have simply left the country.

Regional officials
estimate up to two million Zimbabweans have sought economic refuge in
neighbouring South Africa in the face of the crisis, which Mugabe's critics
say has forced a quarter of the country's 12 million people
abroad.

Mugabe's government has branded inflation and corruption as
arch-enemies in its war to revive an economy which has shrunk by an
estimated 40% in the past seven years.

Dicing with death

The
crisis has left Zimbabwe battling chronic shortages of food, fuel and
foreign currency, a crumbling infrastructure and poor medical
services.

The World Health Organisation said in a report on Friday that
life in Zimbabwe is shorter than anywhere else in the world, with neither
men nor women expected to live to 40 because of the affects of Aids and
poverty.

Women have an average life expectancy of 34 years. On average,
men do not live past 37, WHO said.

The opposition, along many other
critics, blames the deepening economic crisis on Mugabe's policies and
expects the public to explode in an angry revolt soon.

Mugabe, 82,
and in power since independence from Britain in 1980, has used tough
security laws to clamp down on protests.

Last week, Mugabe warned
opposition leader Morgan Tsvangirai that he would be "dicing with death" if
he tries to drive him out of power through mass demonstrations.

Interview: Robert Mugabe

Aljazeera

Thursday 06 April 2006,
13:15 Makka Time, 10:15 GMT

Robert Mugabe, Zimbabwe's president,
hits back at Western critics, saying that human rights in his country are
better than in the United States and that Iraq will not have peace until
US-led troops are withdrawn.

In an interview with Aljazeera that
was aired on April 3, the president defended his land redistribution policy,
which has caused tension between Zimbabwe and Britain.

Mugabe, 82,
has been Zimbabwe's leader since a guerrilla war led to the country's
independence from Great Britain in 1980.

He has been accused of rigging
elections in 2000 and criticised over his nation's rights record, but he
compared Zimbabwe's past with that of the United States.

"Human
rights here are better than those of the United States. We never ran a
system of slavery here," he said.

"Look at what happened in New Orleans.
When you had Katrina... what did Bush do? He just folded his arms, and the
people were drowning and dying."

Iraq invasion

He condemned the US
and Britain over the invasion of Iraq, saying that instability would not end
until foreign forces have withdrawn.

"Leaving things to the Americans and
the British is actually destroying Iraq," he said, suggesting the formation
of a UN body made up mostly of Arab nations to help end
violence.

"Peace cannot come from the Europeans at all," he said. "It
must come from the non-Europeans, because we of the Third World lost
confidence in Europe. The Arabs have lost confidence in Europe."

Farm
seizures

"It is better to have Mugabe in control than have
Zimbabwe descend into chaos and murder"

Alfonso
DeMaio, North America

More
comments...

Friction with the West openly began in 2000, when Mugabe
ordered the seizure of commercial farms owned by descendants of white
settlers, who ruled the country of 12 million before independence and
controlled 70% of the arable land, although they numbered about
4,000.

But Mugabe said problems had surfaced three years earlier, when
Britain and the US ended support for a programme intended to distribute land
to black peasants.

He said that Britain and the US reneged on pledges
- made when the country became independent - to fund land redistribution and
that Zimbabwe had "no money to pay for your British farmers if we take the
land."

How to pay for the land programme is the real source of friction,
he said.

Since the confiscations started, the agricultural economy has
been disrupted and there have been shortages of food, fuel and
imports.

Inflation has sky-rocketed and in February reached
780%.

Mugabe acknowledged difficulties with the land programme, but
blamed problems with agricultural production on a drought and difficulty in
training and getting equipment for new commercial farmers.

"It takes
time to master the ABCs of farming," he said.

He insisted that the land
is distributed fairly. "The land is given to anyone who wants it and can use
it. It doesn't matter whether he's an official or he's a banker or he's a
professor," he said.

Mugabe has been accused of using the programme to
give land to supporters.

Tension

Mugabe, in the past, had blamed
foreign sabotage for his country's economic decline. He said the US and
Britain were at fault for the tensions with Zimbabwe.

"We are not
hostile to anyone," he said. "We are open to the rest of the world, provided
the rest of the world recognises us as equals."

He said that Zimbabwe's
natural allies lay in the East and that the West had lost credibility among
Third World nations.

"If Europe would want to engage Africa,
and indeed engage the Third World, including the Arab countries, China,
India, Latin America. they must cleanse themselves of the past colonial
theories ... that they alone are superior, they alone are thinkers, they
alone are intelligent," he said.

Mugabe, the leader of the ruling ZANU-PF
party, has been accused of rigging elections to remain in power since 2000.
He recently said he would not allow protests by opposition parties to create
upheaval.

In 2005, the African Union adopted a statement criticising
Zimbabwe over the arrests and torture of opposition members of parliament
and stifling freedom of expression.

Out of Sight

Dear Family and Friends,Zimbabwe's rainy season has come to an end and now
we start preparing forwinter and 6 long months of dryness. Early in the
mornings the dew liesheavy on the grass and the evenings have begun drawing
in. Temperaturesare getting cooler and already warning of what we all expect
to be a verycold winter. According to official reports, almost the whole
countryreceived above average rain fall this season and nationwide our dams
are92% full. Everyone is saying that this is the best rainy season we've
hadsince 1980 - the year of Independence - and that this is not
coincidental,it is a sign from the Ancestors: a sign of change. By all
accounts, aftera season like this, we should be in for a bumper harvest,
full silos andstacked warehouses. On the ground though, on the easy to see
roadsidefarms, there is no sign of a bumper harvest waiting to be reaped.
Perhapsthe incessant state predictions of a time of plenty, are from crops
thatare simply out of direct sight. Having just gone through an entire
yearwith virtually no fuel for anything but the most essential travel,
fewpeople have been able to actually get out and see what's happening
onZimbabwe's farms, or in fact anywhere off the beaten track.

At the
start of the rainy season we were told that the army was beingdeployed into
rural and farming areas to "help" with the cropping. Thegovernment called
this "Operation Taguta" or Operation Eat Well. A churchheaded NGO, the
Solidarity Peace Trust, has just released a report on theimpact of army
deployment into rural areas. South African and ZimbabweanAnglican Bishops
travelled to rural areas in Matabeleland and said thatthe army had
"hijacked" plots and maize harvests. The report said thatsoldiers insisted
that only maize could be grown and vegetable gardens andfruit trees had been
destroyed to make more space. South African BishopKevin Dowling said : "This
destruction has turned plot-holders intopaupers overnight." The report also
said that the presence of soldiers inthe rural communities had: "disrupted
the social fabric and left peopleangry and afraid." These two emotions are
probably the most widespreadfeelings in every sector of Zimbabwe, rural and
urban, and this is how weapproach Zimbabwe's 26th anniversary of
Independence - angry and afraid.

I am taking a short Easter break and
will not write next week. I send loveto family and friends for Easter and to
Zimbabweans, wherever you are inthe world, for a happy Independence Day.
With love, cathy. Copyright cathybuckle 8th April 2006. http://africantears.netfirms.com

Learning from Failure

Property Rights, Land Reforms, and the Hidden
Architecture of Capitalism

By Craig J. Richardson

Posted: Thursday, April 6, 2006

DEVELOPMENT POLICY OUTLOOK

AEI Online

Publication Date: April 6, 2006

No. 2, 2006

Few countries have failed as spectacularly, or as tragically,
as Zimbabwe has over the past half decade. Zimbabwe has transformed from one of
Africa’s rare success stories into one of its worst economic and humanitarian
disasters. But while culpability for Zimbabwe’s collapse is broadly attributed
to the policies of President Robert Mugabe, the intricacies of the country’s
unraveling remain poorly appreciated--above all, the importance of property
rights in the process. That is unfortunate, because the destruction of Zimbabwe,
like that of Nicaragua two decades earlier, offers important, cautionary lessons
for other developing countries--as grim natural experiments in the hidden
architecture of capitalism.

Development economists like to study success: how to pull a
country out of poverty, how to spur growth, how to improve living conditions.
This emphasis on positive outcomes is even reflected in their vocabulary: “third
world” countries are now “developing” countries, regardless of whether they are
developing or not.

Yet what about a country undergoing a rapid and devastating
economic collapse? Curiously, development economics has devoted little attention
to studying this phenomenon, and there is scant research to explain how it
happens.

Consider Zimbabwe--a state which, since 2000, has been in an
economic tailspin. Today, it is shrinking faster than any other country on earth
that is not at war. Zimbabwe’s currency is nearly worthless from hyperinflation;
its financial institutions are in disarray; its world-class farms sit idle; and
its manufacturing, mining, and export sectors are declining steeply. The
informal exchange rate for the Zimbabwe dollar is Z$150,000 to US$1; six years
ago, it was Z$55 to US$1. With millions of people having fled the country and
millions more out of work and close to starvation, the question arises: “What
exactly went wrong in Zimbabwe, and how did it take place so quickly?”

Certainly Zimbabwe’s problems have been the subject of scrutiny by
the international community. By 2003, real output had already dropped by
one-third, and the International Monetary Fund (IMF) was determined to know why.
In its yearly Article IV report, the IMF produced a laundry list of potential
culprits, including loose fiscal and monetary policies, a fixed exchange rate
highly out of sync with “street prices,” and price controls. The IMF blamed
these “inappropriate economic policies” for the collapse. President Robert
Mugabe’s land reform program, along with the ongoing HIV/AIDS pandemic, were
identified as “exacerbating” Zimbabwe’s newfound poverty, but not the primary
reason for it.[1] The IMF’s recommendations were consequently macroeconomic in
nature: they included freeing up price controls, as well as exchange and
interest rates, and clamping down on the money supply.

Yet what the
IMF’s analysis never sufficiently addressed was how and why the rapid collapse
of Zimbabwe’s economy occurred in the first place. The sharp upward pressures on
prices and exchange and interest rates were the result of a swift increase in
the money supply, to be sure. Yet since 2000, where had the pressure to print
money--on a scale never before seen--come from? Why were previously sound banks
failing by the dozens? And given the enormous foreign direct investment (FDI) in
Zimbabwe in the late 1990s, why were investors suddenly jumping
ship?

Given the breadth of Zimbabwe’s problems, it is perhaps
unsurprising that no one has attempted to put forward a comprehensive
explanation for them. Reviewing the IMF’s reports, Zimbabwe simply appears to be
a country falling apart under the collective weight of countless bad policies.
To an outside observer, it might seem difficult, if not hopeless, to tag any one
factor with overarching culpability.

But while many problems cited by
the IMF and others are important, they do not provide a full explanation for how
a country can lose fifty years of economic progress in only five years.[2] In
fact, Zimbabwe’s collapse can be traced to a single policy: its fast track land
reform program, under which the Mugabe government, beginning in 2000, seized
thousands of white-owned commercial farms, leading to a sharp drop in
agricultural output. The other “inappropriate” policies adopted by the Mugabe
government exacerbated the damage, but they were not the underlying cause.

Although the introduction of Zimbabwe’s land reforms coincided
with its dramatic collapse (see figure 1), a puzzle remains: the farming sector
was only 18 percent of the entire economy. Other sectors, such as banking,
tourism, manufacturing, and mining, also shrank dramatically during this time,
however. How, then, to explain the discrepancy?

In fact, the damage done to property rights by the land reforms
caused a series of ripple effects throughout Zimbabwe’s other economic sectors.
Studying this “cascade failure” helps better reveal the framework of developing
market economies--what economist Hernando de Soto calls “the hidden
architecture” of capitalism. In this regard, the destruction of Zimbabwe
represents a grim “natural experiment” that illustrates the tremendous negative
consequences of ignoring the rule of law and provides a cautionary lesson for
what other developing countries should not do in the future.

Unfortunately, the rebuilding of an economy after property rights
have been revoked is likely to be contentious and slow, akin to rebuilding trust
in a relationship after a serious betrayal. The case of Nicaragua is
illustrative in this regard as a counterpoint to Zimbabwe, as its history of
land expropriation under the Sandinistas, its resulting collapse, and its long
and difficult struggle toward recovery provide useful clues for what a
post-Mugabe future might hold.

The Debate about Land
Reform

With its modern roads, strong education system, low crime rate,
and diversified economy, Zimbabwe was once considered one of Africa’s success
stories. Economic growth from 1980 to 1989 averaged a robust 5.2 percent in real
terms, and while it slowed from 1990 to 1999 due to questionable macroeconomic
policies, it still averaged 4.3 percent during this period.[3] A major reason
for the country’s prosperity was its sophisticated commercial farming sector.
Vast tracts of large-scale farms produced thousands of acres of tobacco, cotton,
and other cash crops. About 4,500 white families owned these farms. In contrast,
840,000 black farmers eked out a living on small and relatively infertile plots
in the communal lands, producing maize, groundnuts, and other staples.

By the late 1990s, a broad consensus had taken shape--including
the Mugabe government, the IMF, the United Nations, the British government (the
original colonial power in Zimbabwe), Africa scholars, and even many of
Zimbabwe’s white commercial farmers--that land reforms were needed. The purpose
of these reforms would be to improve agricultural productivity and,
simultaneously, increase wealth for the black majority. The sensitive issue was
how to redistribute the land, since the commercial farming sector provided much
of the country’s foreign exchange, created thousands of jobs, and produced the
essential staple of maize.

While the IMF and the British advocated that landowners be given
adequate compensation, as dictated by Zimbabwe’s own laws, the Mugabe government
argued that these lands had been “stolen” from the country’s black inhabitants
and thus could simply be taken back. This claim ignored the fact that more than
80 percent of white-owned commercial farms in Zimbabwe had been purchased
through the commercial real estate market since Robert Mugabe came to power in
1980, and less than 5 percent of the farmers could trace their ancestry back to
the original British colonialists who arrived in the 1890s.[4]

At independence in 1980, furthermore, the government had passed a
law that gave itself the right of first refusal on any rural land offered for
sale. If the government did not desire a farm for resettlement purposes, a
“certificate of no current interest” was issued, and the property went up for
sale, with a title being issued. Buyers therefore trusted that their property
was safe and secure from government expropriation.[5]

As late as 1998, in fact, the IMF predicted that the Zimbabwean
government’s land reform would unfold in a fair and legal manner:

While the land reform program is still in the early design stages,
the redistribution of land will proceed within the confines of the law and the
pace of land acquisition will be governed by the availability of budgeting
resources. Moreover, the land redistribution will be undertaken in an orderly
and transparent manner to protect agricultural output and the welfare of workers
on the farms to be acquired . . . Looking ahead, the implementation of a more
comprehensive land reform program will directly assist the poorest and most
deprived members of society, particularly those in high-density rural
areas.[6]

As it turned out, however, the IMF--along with everyone else who
trusted the Mugabe government--was soon proven wrong. Beginning in 2000, Harare
began seizing control of white-owned farmland, with no compensation for its
owners, and then redistributing it to political cronies in the ZANU-PF political
party, rather than poor rural farmers. Because most of the new owners knew
little about farming, agricultural production dropped sharply. Land titles were
declared null and void, and all contracts and mortgages related to the farmland
were suddenly worthless. The Mugabe government thus recast land reform into a
tool of political patronage, with the renewal of leases left to the whims of the
party leadership.

Debunking the Myths about Zimbabwe’s
Collapse

The Mugabe government, the United Nations, the IMF,
international aid agencies, and NGOs have offered many excuses for Zimbabwe’s
precipitous collapse, all of them downplaying the impact of the land reforms and
Harare’s malfeasance. None are plausible as an alternative underlying
explanation for the country’s unraveling, however. Consider a few of the
favorite bugaboos:

Persistent Droughts. Reports by the UN, the
IMF, and the U.S. Department of Agriculture have argued that Zimbabwe’s
devastating food shortages since 2000 are largely attributable to “severe
drought”--a line that President Mugabe and other government officials have been
only too happy to parrot. However, the reports in question relied either on
unreliable, secondhand information or on data from a small sample of rainfall
stations. Data from all of Zimbabwe’s ninety-three rainfall stations indicate
that the “drought” of 2000-2001 was 22 percent below the country’s fifty-year
average, and that rainfall in subsequent years was much closer to the norm.[7]
In addition, Zimbabwe has extensive irrigation infrastructure, including nearly
11,000 reservoirs, which should have given the country a tremendous cushion
against droughts.

Foreign Sanctions. Zimbabwean government
officials frequently cite international sanctions as the reason for their
country’s economic collapse. But while some narrowly tailored sanctions have
been levied on specific high-level individuals and their families, these
sanctions only impact firms connected to the regime’s leaders. In fact, American
companies are free to invest in Zimbabwe and trade with any person there, other
than eighty-six senior officials.

Lavish Spending on Veterans. In 1997, the Zimbabwean
government recklessly spent 9.7 percent of its budget on a payout to war
veterans from the 1970s battle for independence.[8] This lavish expenditure has
been widely cited as the beginning of Zimbabwe’s economic downfall.[9] Yet while
the payout caused a large, one-time jump in the inflation rate, a closer look
reveals that prices, along with Zimbabwe’s GDP growth, actually remained within
a stable band for the next three years (see figure 2). In addition, the payout
was not large when compared to Zimbabwe’s total economic output; it consumed
only 3.7 percent of GDP in 1997, and dwindled after that (see figure 3).[10] The
rapid economic collapse occurred only after 2000 and was not the result of some
mysterious multiyear lag, but because this is precisely when the government
began rapidly printing money.

Irresponsible Macroeconomic Policies. While the IMF has
blamed Zimbabwe’s post-2000 collapse on a host of bad macroeconomic policies
adopted by the Mugabe government, many of these policies were already in place
in the late 1990s, including “large and protracted fiscal deficits” and an
“accommodating monetary policy.”[11] Despite this, the country’s economy grew by
3.7 percent in 1997, and 2.5 percent in 1998.[12] Zimbabwe was able to weather
the Mugabe government’s poor governance because the rule of law was still
intact, keeping its underlying banking institutions relatively strong. Certainly
lax macroeconomic policies nudged the economy in the wrong direction, but not
enough to provoke an unpreceden-ted collapse.

The Hidden
Architecture Revealed

If the usual explanations for Zimbabwe’s
implosion are insufficient, why do the country’s land reforms provide a better
explanation? The argument here is straightforward: the expropriation of land
without compensation destroyed property rights--the foundation of the
economy--and led to a chain reaction, which was exacerbated by additional
actions of the Mugabe government.[13]

Property rights are analogous to the concrete foundation of a
building: critical for supporting the frame and the roof, yet virtually
invisible to its inhabitants. In fact, there are three distinct economic pillars
that rest on the foundation of secure property rights, creating a largely hidden
substructure for the entire marketplace. They are:

Trust on the part of foreign and domestic investors
that their investments are safe from potential expropriation;

Land equity, which allows wealth in property to be
transformed into other assets; and

Incentives, which vastly improve economic productivity,
both in the short and long term, by allowing individuals to fully capture the
fruit of their labors.

How did Mugabe’s destruction of property rights lead to the
collapse of these three pillars, and with it, the country’s economy? In sifting
through the rubble, it is clear that the pillars were not of equal strength.
Trust is the most fragile of the three pillars and was the first to
disintegrate, followed by land equity, and lastly, producer and worker
incentives. Watching Zimbabwe’s economic unraveling is chillingly reminiscent of
watching a building collapse in slow motion after a series of timed explosions.
The case study also reveals how the hidden yet fragile architecture of
capitalism can so quickly fall apart once its substructure is substantially
harmed.

Investor Trust. In 1993, the Zimbabwean Stock
Exchange (ZSE) was opened to foreigners for the first time. Investors were
bullish on Zimbabwe, and by 1996, Zimbabwe’s equity markets were surging. More
than half the growth in the top thirty-five sub-Saharan companies (excluding
South African groups, which are listed separately) came from Zimbabwe. The
number of Zimbabwean companies in the region’s top thirty-five rose from nine to
eleven in one year, but more importantly, their combined market capitalization
more than doubled from $1.2 billion to $2.6 billion. Zimbabwe was one of the top
performers in the world’s emerging markets and a new favorite of investors.

Just before Christmas 1997, however, the government announced that
1,471 of the country’s 4,500 farms had been earmarked for compulsory
acquisition. This kind of rhetoric had been heard before from Harare, and
consequently, the threat of land redistribution was largely dismissed as “callow
promises by politicians intent on whipping up support for the next
election.”[14]

Yet by 1998, the government’s language became even more heated.
Speaking to prospective voters in the Matobo district in September of that year,
President Mugabe attacked “rich farm lands in former white colonial hands” and
argued that expropriation would “cure the economic and social ills bedeviling
the nation.”[15]

The ZSE began to plunge sharply soon thereafter. News reports
indicated that investors were increasingly leery of the government’s plans and
losing confidence in its ability to govern. By the end of 1998, the value of
stocks traded on the ZSE dropped by a stunning 88 percent.

As Christopher Dell, U.S. ambassador to Zimbabwe, has noted,
“Nothing rattles investor confidence more than the prospect of expropriation.
The [February 2000] constitutional amendment striking down the right to redress
for victims of land expropriation sent a shockwave through the community of
investors who keep an eye on the climate in Zimbabwe.”[16] Between 1998 and
2001, foreign direct investment dropped by 99 percent (see figure 4).[17] In
addition, the World Bank risk premium on investment in Zimbabwe jumped from 3.4
percent in 2000 to 153.2 percent by 2004.

It is hardly surprising that the stock market and FDI collapsed so
quickly, and somewhat in advance of the actual farm seizures. After all, this
type of wealth is the most fluid and therefore the most volatile. With a few
keystrokes tapped out on a computer, investments can instantly move thousands of
miles from Zimbabwe to a more promising country. These markets serve as
bellwethers and at least partially explain why the economy began turning south
prior to the land seizures. With little or no psychological bond to the country,
foreign investors are usually the first to leave. Their trust is difficult to
build, and easy to lose.

Access to Land Equity. As the Mugabe
government began its program of land expropriation without compensation in 2000,
the Zimbabwean Supreme Court declared the fast track land reform
unconstitutional. It was then, for the first time in the country’s
post-independence history, that Mugabe openly ignored the rule of law. Prior to
this point, the government had followed court orders and allowed the appeal
process to run its course. Now, however, Mugabe replaced unfriendly judges with
cronies, securing his desired ruling in December 2001. Land titles and private
land ownership had become a thing of the past.

Before 2000, commercial farmers relied on their land as collateral
to secure loans from banks, which they then used to purchase seeds for the
coming season, along with tractors and other capital. Secure property titles
thus served as a key insurance mechanism for banks and “were the cornerstone to
stimulating the entrepreneurial spirit that developed the [farming] sector,”
according to Neil Wright, a Zimbabwean economist for the Commercial Farmers’
Union.[18]

After the land reforms began in 2000, newly resettled Zimbabweans
were assigned plots of former commercial farmland but were forced to lease it
year to year from the government. With no means to borrow against their land,
the new farmers could not obtain loans. Moreover, their knowledge of farming was
often meager, resulting in yields that were a small fraction of previous
harvests. As the farm seizures continued, banks became increasingly reluctant to
lend to the remaining commercial farmers whose land had been listed for
compulsory acquisition by the government or occupied by squatters.[19]

A vast constriction of borrowing occurred, which rippled from
business to business, and sector to sector. With the Zimbabwean government
declaring itself the sole owner of farmland, banks and other property owners now
held worthless titles. The land became what Hernando de Soto calls “dead
capital,” because it was unable to be leveraged and used as equity. An estimated
$5.3 billion worth of land value vanished as a result. In 2001 alone, this loss
of financial equity in the farmland sector exceeded all of the World Bank aid
ever given to Zimbabwe by a whopping 242 percent.[20] This drop in wealth also
equaled 65 percent of Zimbabwe’s GDP in 2003, which the World Bank estimated at
$8.3 billion.[21]

With banks now holding worthless titles and unable to
foreclose on properties, thirteen of Zimbabwe’s forty-one banking institutions
were in financial crisis by late 2004. The amount of credit sharply contracted,
affecting all sectors of the economy. Gross fixed capital formation, heavily
dependent on loans, fell by 43 percent, from $1.1 billion in 1999 to $0.6
billion in 2001.[22]

Prior to 1997, an average of 1,600 tractors was
sold per year throughout Zimbabwe, with farmland typically used as collateral.
By 2002, total national sales dropped to only eight tractors according to a 2003
IMF report.[23] The OECD reported that gross private capital formation, once a
healthy 20 percent of GDP in 1995, fell to -6.7 percent in 2002, as farming
equipment was looted, destroyed, or sold. New farmers saw little reason to
invest in tobacco barns or tillage equipment without the security of property
rights and faith in the rule of law.[24]

Zimbabwe’s conversion from productive to dead capital was now
nearly complete. Just as de Soto’s work has shown how developing countries can
harvest wealth by turning “dead” capital into “live” capital as a result of
titling land and using that property as collateral for bank loans, the case of
Zimbabwe shows that these ideas work in reverse as well--with grim results.

This, then, is the second “pillar” of the economy that crumbles
when land reform movements destroy property rights. Bank investments are
certainly less volatile than stock markets and FDI and have the ability to
withstand greater shocks to the system, when secure rule of law is under threat.
Their movements are defensive in nature: they strive to protect existing
contracts and mortgages tied to physical property, but wait out the storm by
sharply reducing their exposure to risk. Yet banks are not as tied to the land
as the individual farm-holders, who may have put years into clearing out rocks,
nourishing orchards, or laying irrigation pipes. Thus, banks’ exit generally
comes second, after the foreign investors.

Entrepreneurial
Incentives and Knowledge. In her book African Tears, Zimbabwean
commercial farmer Catherine Buckle describes the struggle of her family to stay
on a farm that they had run for nearly a decade, in the face of land reforms.
The purchase of the farm by the Buckles in 1990 was sanctioned by a government
“certificate of no interest,” which meant it was a farm that was supposedly not
under threat of expropriation. For seven months during 2000, the Buckles watched
as war veterans grew increasingly bold in their harassment, chopping down the
farm’s 3,000 gum trees and eventually burning their home to the ground.

For 171 days our farm had been under invasion, our every move
watched. For 171 days we had been living behind permanently locked gates,
sleeping with car keys under the pillow. For 171 days we had not been able to
farm the land that was ours, had made no plans for the coming season, had made
no money and had lived off the capital realized from sold
assets.[25]

What is most remarkable, however, is how long it took for the
Buckles and others like them to leave. Even under threat of their lives,
displaced commercial farmers took their cases to the Zimbabwean courts, property
titles in hand, arguing that the seizures were unlawful. They lobbied the
Commercial Farmers’ Union for better representation in government and defended
their property with firearms. Eventually, however, most pulled up their stakes
and moved to places like Australia, Zambia, or Mozambique, taking their immense
knowledge of farming with them. Ironically, they were welcomed with open arms in
these countries, and agricultural yields have sharply increased where they
settled. Zambia, for instance, has awarded ninety-nine-year leases to former
Zimbabwean farmers, whose knowledge and investments have contributed to the
country’s recent “exceptional agricultural performance” and 5 percent annual
growth rate, according to a 2005 OECD report (see figure 5).[26]

Zimbabwe, meanwhile, has experienced a tremendous drop in
agricultural production. Maize, groundnuts, cotton, wheat, soybean, sunflowers,
and coffee production contracted between 50 and 90 percent between 2000 and
2003.[27] While Zimbabwe once produced an export surplus of seed, it is now an
importer, because most of the high-yield hybrid seed production skills have been
lost. To make matters worse, the hard currency lost from commercial farming
output has meant that the new farmers often have no money for inputs like seeds,
fertilizer, spare parts, or gasoline.[28]

Zimbabwe thus demonstrates how
entrepreneurial incentives often involve an emotional as well as physical
investment in a tangible asset--in this case, land. Property owners have the
most to lose and the least to gain by uprooting their livelihoods and moving to
another country. Their departure signals the final stage of economic
collapse.

Cascade Failure

The loss of Zimbabwe’s
4,000 farms has impacted every aspect of the country’s economy. Each of these
farming companies employed 100 or more people, paid various taxes to the
government, and generated incomes for others that also yielded taxes. In
addition, the farms provided housing, clinics, and schools; more than a million
Zimbabwean children, in fact, received an education from farm schools. Communal
farmers also benefited from the farming companies, sourcing their demands for
seed, fertilizer, chemicals, and expertise to them.[29]

Unsurprisingly, then, the destruction of Zimbabwe’s farms has
created massive social disruptions. It has thrown hundreds of thousands of black
farm workers out of work, driving them to Zimbabwe’s largest cities, Harare and
Bulawayo, looking for jobs, or into neighboring South Africa and Mozambique.
These newly homeless, newly poor refugees have set up makeshift shanties in
Zimbabwe’s cities in an effort to make ends meet--squatter settlements that were
subsequently attacked and bulldozed by the Mugabe government in the summer of
2005.

Although agriculture was only directly responsible for 18 percent
of the Zimbabwean economy, 60 percent of the country’s non-farm enterprises
directly or indirectly depended on commercial agriculture inputs. As a result,
700 non-farming companies had shut their doors by late 2001. In addition, the
agricultural sector of the economy employed 60 percent of the entire population,
which meant that millions of unemployed workers now had far less disposable
income to purchase the nation’s goods and services.[30]

Commercial tobacco and cotton farms also provided about 40 percent
of hard currency in the country, necessary for imports like fuel, machinery, and
medicine. With the collapse of the commercial agricultural sector, food and
other basic goods disappeared from shelves, and widespread fuel shortages
paralyzed the country’s cars and planes.[31]

Without hard currency in its coffers, the Mugabe government turned
to the Reserve Bank of Zimbabwe to pay its bills. Annual money supply growth
rose from 57 percent in January 2001 to 103 percent by the end of the year,
inaugurating a cycle of devastating hyperinflation.[32] According to the OECD,
the acute food shortages caused by the land reforms meant that the country,
which was once a net exporter of maize, had to print billions of Zimbabwean
dollars to import food.[33] The government even ran out of hard currency to buy
the imported ink needed to manufacture its own money; as a result, bills were
only printed on one side. By March 2006, it took Z$60,000 to buy one loaf of
bread, even as a new Z$50,000 note was being printed to “keep up” with the
demands of higher prices.

“This country is upside down now,” said one of
Zimbabwe’s newly dispossessed. “Once we had beef and tobacco and maize and
now--look--we have to stand in line for petrol, for money, for mealie meal, for
sugar. Soon there will be no country left at all.”[34] Ox-pulled ambulances have
returned to the countryside and once mothballed steam locomotives are being
pulled out of retirement, as the country has no money for diesel fuel. Zimbabwe
now vies for a number of depressing world records: most orphans per capita,
highest number of AIDS cases per capita, and lowest life span, at thirty-eight
years.[35] It was recently rated by the World Economic Forum as the world’s
worst place to do business out of 117 countries
surveyed.[36]

Lessons from Nicaragua

The decline
of Zimbabwe’s economy is eerily similar to that of Nicaragua two decades
earlier. Like Zimbabwe, Nicaragua was a country with strong economic growth and
a rich landholding elite. By the late 1970s, the perceived failure of the Somoza
dictatorship to address the country’s economic and social inequities was
exploited by Communist revolutionary Daniel Ortega and the Sandinista political
party, which seized power in 1979 after three years of heavy
fighting.

Like Mugabe’s ZANU-PF party, the Sandinistas were especially
interested in land redistribution. In July 1979, they authorized the first
confiscations of property belonging to Somoza. The vague wording and lax
application of the decree allowed officials from the newly formed Ministry of
Agricultural Development and Agrarian Reform to confiscate property from any
“follower” of the old regime. Other orders soon followed, allowing members of
the party to take control of “abandoned” property, unused urban property, and
companies whose management was thought to be “de-capitalizing” the enterprise.
Eventually the Sandinistas seized 34 percent of all arable land.[37]

As in Zimbabwe, government officials rather than poor peasants
were the principal beneficiaries of the redistribution. It has been estimated
that more than 70 percent of the Sandinista land grants were legally suspect and
thus they lost much of their equity value. While the Sandinista government
ultimately confiscated approximately 170,000 properties during its eleven years
in power, only 55,000 households received private titles, which were of
questionable security.[38]

The seizing of assets did not end there. Between 1979 and 1981,
decrees were issued by the government that allowed it to expropriate banks,
insurance companies, mining companies, and other enterprises “working against
the state.” Promises were made to compensate the former owners, but this rarely
occurred.[39] Through the next ten years, the Sandinista government nationalized
351 enterprises, which together accounted for nearly a third of the Nicaraguan
economy.[40]

Although foreign direct investment in Nicaragua was
minuscule at the outbreak of the revolution--only $10 million--it nonetheless
served as a fledgling indicator of investor trust. By 1979, Nicaraguan FDI had
plunged to zero, and almost none entered the country over the next decade.[41]
Access to loans likewise dried up. Domestic credit provided to private
businesses fell from 45 percent of GDP in 1979 to 18 percent in 1984, and to 13
percent in 1987.[42]

These conditions proved paralyzing. There is little point to
improving productivity or planning for the future if the result of one’s work
may end up in the state’s hands.

Not surprisingly, during the first three years of the revolution,
from 1977 to 1979, per-capita income declined by more than 35 percent; by the
end of Sandinista rule, per-capita income had fallen by half, just as it has in
Zimbabwe.[43] Meanwhile, government spending soared through the 1980s, and the
central bank printed money to cover the deficits. At its worst, prices grew at
an annual rate of more than 14,000 percent.[44]

The Attempt to Restore Property Rights. By 1990,
Nicaragua was in shambles. The Sandinista government agreed to hold democratic
elections that year, and Violeta Barrios de Chamorro was subsequently elected as
president. Through the next five years, her government attempted to reverse
Nicaragua’s economic slide with a strong emphasis on restoring property
rights.[45]

In particular, the Nicaraguan government devoted tremendous
resources toward properly titling land. It did this through the founding in late
1991 of the Nicaraguan Institute of Agrarian Reform (INRA), which served as a
component of the National Program of Land Measurement, Titling and Registration.
INRA provides technical support in the legal reconsideration of property titles
that had been seized by the Sandinista administration from private individuals.
Together, these holdings encompassed 615,000 hectares of land.

The work of INRA yielded tangible benefits, at least at first.
Researchers Rikke J. Broegaard, Rasmus Heltberg, and Nikolaj Malchow from the
Center for Development Research in Copenhagen found strong evidence in 2002 that
where title deeds have been issued in Nicaragua, the economic productivity of
the land has increased. Individuals with deeds invest in long-term land use,
growing perennial crops such as coffee and managing their property more
effectively.[46] These findings at least partially explain the economy’s
positive growth after 1993 (see figure 6). From 1995 to 2000, in fact, Nicaragua
was one of the fastest growing countries in the world, with an average annual
GDP growth rate of 5 percent.

Yet for those looking for clues on to how to rebuild Zimbabwe
after Mugabe, the experience of post-Sandinista Nicaragua also shows just how
difficult restoring property rights can be. Thousands of current and former
property owners in Nicaragua continue to lock horns over property disputes, with
no resolution in sight. In 2002 the country was engaged in more than 160,000
title disputes, and the government remains swamped with legal challenges.[47]
For one of the poorest countries in the hemisphere, this represents an enormous
diversion of resources. For every two people in a dispute, one is likely to walk
away frustrated and without property, while the other is exhausted by the long
and arduous process.

To try to settle these disputes, INRA first determines the value
of the land, paying out the resulting compensation to former property owners in
bonds that mature in fifteen years. The bonds trade for about twenty cents on
the dollar, however, so former owners get far less than the value of their lost
property.[48] Many Nicaraguans do not want to wait fifteen years to be paid--not
surprising, given the country’s experience with instability and
hyperinflation--and sell their bonds immediately, getting what they can for
their property.[49]

Since 2002, under President Enrique Bolaños,
Nicaraguans have grown increasingly impatient with the slow pace of economic
growth and continuing land disputes--frustrations compounded by hurricanes,
banking crises, fiscal imbalances, and commodity price fluctuations. Lino
Hernandez, president of the Permanent Commission of Human Rights of Nicaragua,
has stated that “if there is no solution to the property question, there will be
no security or investment in this country. Ten years have passed and we feel
powerless that we cannot find a solution to this
problem.”[50]

Conclusion

The prospect of land
reform can be appealing, even seductive, to developing countries with large
disparities in wealth--a simple matter of extracting resources from a “less
deserving” rich minority and redistributing them to a “more deserving” poor
majority. Yet as seen in both Zimbabwe and Nicaragua, the outcomes of fast track
land reform have enormous potential to backfire, leaving everyone worse off than
before.

Unfortunately, around the world, several countries continue to
ignore this sobering lesson. In South Africa, President Thabo Mbeki expressed
interest during his recent State of the Union speech in revisiting the
“willing-buyer, willing-seller” principle for land redistribution. The
government is expected to begin expropriating farmland at state-determined
prices beginning this year--part of a broader attempt to address the economic
inequalities inherited from apartheid.[51] Deputy President Phumzile
Mlambo-Ngcuka agrees that the pace of land reform should be accelerated. “There
needs to be a bit of oomph,” she said in a 2005 interview. “That’s why we may
need the skills of Zimbabwe to help us.”[52]

In Namibia as well, there are longstanding political disagreements
over land reform. Like Zimbabwe, Namibia has approximately 4,000 commercial
farms, the vast majority of them white-owned. The government has announced its
intention to buy and redistribute 9.5 million hectares of farmland to 243,000
landless citizens, but there is little evidence that it can afford to do so at
market prices.[53] In 2004, however, President Sam Nujoma announced his
intention to expropriate 192 “absentee landlord” farms--owned mainly by German
and South African nationals--which together comprise 2.9 million hectares.
Unlike Zimbabwe, Namibia has pledged some form of compensation to farmers who
lose their land, but it remains to be seen to what extent those promises are
honored.

The initial results of Namibia’s resettlement program are
similarly discouraging. The Legal Assistance Center, a NGO based in Namibia,
found in late 2005 that “most resettled persons had little or no knowledge of
rotational grazing, livestock breeding systems, or financial planning and
management skills. Instead, they simply continued subsistence farming on the
piece of land they had been allocated.” The research team did not find a single
resettlement project to be sustainable beyond five years.[54]

Namibia,
South Africa, and other countries considering land reforms should pay heed to
the disastrous experiences of Zimbabwe and Nicaragua before plunging ahead. As
the market’s foundation, property rights serve many purposes: they bind together
work and rewards, expand time horizons from days to years, allow wealth to be
transformed into other assets, and encourage foreign investment. The speed at
which an economy can develop ultimately depends on the ability of the government
to inspire trust among citizens, banks, and investors that it will fairly
enforce the rule of law.

Other factors are important as well, such as free markets, stable
money supply, good health care, strong educational systems, and ease of starting
a new business, but none ultimately matter as much as the individual’s ability
to secure and retain property rights.

Craig J. Richardson is associate professor of economics at
Salem College and the author of The Collapse of Zimbabwe in the Wake ofthe
2000-2003 Land Reforms (Edwin Mellen Press, 2004).

AEI
research fellow Vance Serchuk is editor for the Development Policy Outlook
series. AEI editor Scott R. Palmer worked with Mr. Serchuk to edit and
produce this Outlook.

9. Sources that
emphasize the 1997 payout to war veterans as a major contributing factor in
Zimbabwe’s collapse include: Tony Hawkins, “Ill-Judged Measures Spur Zimbabwean
Decline,” Financial Times, September 20, 2000; Philip Gourevitch,
“Wasteland: Comrade Mugabe is Clinging to Power, and Taking His Country Down
With Him,” The New Yorker, June 3, 2002; and “Compensation Payments to
Reward Ex-Detainees Launched Ahead of Elections,” IRINnews.org, February 10,
2005.

13. I have presented the broad contours of this section’s argument
in two previous publications: The Collapse of Zimbabwe in the Wake of the
2000-2003 Land Reforms: Studies in African Economic Development, vol. 24
(Lewiston, New York: Edwin Mellen Press, 2004), 4-5; and “The Loss of Property
Rights and the Collapse of Zimbabwe,” 548-554. Here I present a more nuanced
explanation that considers the fragility of each of the three “pillars” of the
marketplace, based on updated information.

15. Electoral Institute of Southern Africa, The Land Issue in
Zimbabwe (Auckland Park, South Africa: EISA, February 2002), available at
www.eisa.org.za/WEP/zimland.htm.

16. Christopher Dell, “Plain Talk about the Zimbabwean Economy,”
(speech, Africa University, Mutare, Zimbabwe, November 2, 2005), available at www.swradioafrica.com/pages/dell021105.htm. Ambassador Dell is
referring to the government-organized referendum in February 2000, which
proposed that Zimbabwe’s new constitution empower the government to acquire land
compulsorily without compensation. This referendum was soundly defeated, but the
damage was done in investor confidence nonetheless.

17. There was a significant spike in foreign direct investment
in 1998, reflecting the purchase of a large platinum mine, the Hartley Mine
Project. This was the single largest foreign investment ever made in Zimbabwe.
Unfortunately there were innumerable tie-ups with the importation of technology,
as well as disputes with local government officials, who claimed the mine owners
were not hiring enough indigenous people. The investors got fed up and sold the
mine to another company. Today Zimbabwe has nearly the lowest FDI confidence
index in the world, although continued investment in mining remains a rare
bright spot.

20. Calculation by Craig Richardson using information from
Zimbabwe’s Commercial Farmer’s Union and the World Bank. See Craig Richardson,
“The Loss of Property Rights and the Collapse of Zimbabwe,” 551-552.

21. Ibid., 551.

22. World Bank, 2000 Development Indicators (Washington,
D.C.: World Bank, 2000). No information is provided after 2001.

27. Calculations made using data provided to the author by
Commercial Farmers’ Union, Zimbabwe.

28. Ibid.

29. Data provided by Zimbabwean economist John Robertson.

30. U.S. Department of State, Zimbabwe: Country Reports on
Human Rights Practices--2004 (Washington, D.C.: Bureau of Democracy, Human
Rights, and Labor, February 28, 2005), available at www.state.gov/g/drl/rls/hrrpt/2004/41634.htm.

INTERVIEW-Some African govts hinder aid-UN envoy

Reuters

Sat 8 Apr
2006 5:28 AM ETBy Jack Kimball

NAIROBI, April 8 (Reuters) - Spurned
on recent trips to Africa, the United Nations' top humanitarian official has
said some African leaders are hindering the world body's work at the expense
of their own citizens.

Jan Egeland, the U.N. under secretary for
humanitarian affairs, this week was denied permission to visit Sudan's
troubled Darfur region for a second time.

And his 2005 trip to see
the impact of a slum destruction programme in Zimbabwe infuriated President
Robert Mugabe.

"In most countries it's going well, but in some we do not
get neither the access, the security or the support that we need in
situations where it's their citizens' lives that are at stake," Egeland said
when asked why some African leaders were not welcoming the United Nations
into their countries.

Political considerations often get in the way, he
said.

"I think it's because there is this short-term vision where they
think 'I can't politically survive in my position today'," he told Reuters
in an interview.

"And the inability for some leaders to stand up to
truth of what's really happening in their country."

Egeland, in
charge of coordinating the U.N.'s humanitarian and emergency relief work,
has put a major focus on Africa since taking office in 2003.

Darfur has
been on the top of Egeland's agenda, and Sudan has twice denied him access.
This time, Khartoum said it had only asked him to delay his
trip.

Tens of thousands have been killed and millions driven from
their homes during more than three years of conflict, which the United
States has called genocide.

TRIP TO ZIMBABWE

After
Egeland's Zimbabwe visit, Mugabe accused him of being a "hypocrite and a
liar."

Egeland was the most senior U.N. official to visit Zimbabwe since
the government embarked on a slum-demolishing campaign last year. The United
Nations estimated it had destroyed the homes or livelihoods of more than 3
million people.

Egeland said the United Nation's experience in the
Democratic Republic of Congo, where a peacekeeping force has made it much
easier to deliver aid, was a model for Darfur.

"It had a massive
positive affect on humanitarian access and ability for us to facilitate the
return of displaced," he said.

Egeland said a U.N. force in Darfur would
have to be twice the size of the 7,000-strong African Union team there now
and have the mobility to patrol an area the size of France.

"This is
not a conventional war here. We have cowardly men on horseback or camels or
pickups who specialise in killing women and children," Egeland
said.

Sudan has refused to bow to international pressure to accept a
U.N. takeover of the AU force in Darfur, but said it might consider that
after a peace deal is reached with Darfur rebels.

Militarization of Zimbabwe Agriculture Leads to Abuses - Report

VOA

By
Carole Gombakomba Washington 07 April
2006

The Zimbabwean governments Operation Taguta-Sisuthu, Shona
and Ndebele for "Eat Well," under which soldiers have taken charge of farms
large and small, has been a disaster for farmers in Matabeleland, according
to a report issued by the Solidarity Peace Trust, a nongovernmental
organization based in South Africa.

The organization issued a report
saying soldiers have mismanaged irrigation schemes and "systematically"
destroyed market gardens that provided essential income to the farming
communities, leaving them impoverished and at great risk of
hunger.

The report on Zimbabwe's program of "command agriculture" said
gardens were torn up to ensure that only the maize, the country's main
staple, would be grown. Even then, maize farmers were deprived of the
traditional share of the harvest that the Grain Marketing Board Act
guarantees them for household consumption.

The report says soldiers
have beaten people in the fields in Matabeleland, and that plot holders feel
they are being treated as indentured laborers with no rights and no claim to
their produce. The presence of soldiers "has disrupted the social fabric and
left people angry and afraid," said the report, adding that this atmosphere
brings back memories of the so-called Gukurahundi operations of the 1980s
when Zimbabwe's Fifth Brigade terrorized the region in an ethnic-political
purge.

The Solidarity Peace Trust, chaired by Roman Catholic Archbishop
Pius Ncube of Bulawayo, an outspoken critic of President Robert Mugabe,
urges nongovernmental organizations and the international community to
demand that the government make clear its actual intentions in pursuing
Operation Taguta-Sisuthu. The Trust is urging an investigation into the
destruction of market gardens and loss of income which has ensued, followed
by prosecution and compensation for losses.

The organization said the
army should be charged with violating the GMB Act where troops have seized
the maize of irrigation plot holders or deprived farmers of maize which they
have grown and need to retain for their family's survival.

A senior government official challenged the report.
William Nhara, director of public and interactive affairs in the office of
President Robert Mugabe, said such reports are being fabricated to discredit
an operation intended to improve food output.

But Bulawayo-based
political activist Felix Mafa said that while the government may dismiss
such reports, that does not change the reality on the ground.

Politics Bury Mortuary Project

Zimbabwe Standard (Harare)

April 2,
2006Posted to the web April 7, 2006

Gweru

A committee set up
to raise funds for the rehabilitation and expansion of Gweru Provincial
Hospital mortuary has failed to start work after Zanu PF officials objected
to its composition, The Standard has learnt.

The Midlands Governor Cephas
Msipa, who was involved in setting up the committee, decided that it was
prudent to co-opt Gweru mayor, Sesel Zvidzayi, as chairperson of the
fund-raising committee, The Standard understands.

However, some
ruling party provincial officials, keen to portray the project seen as a
Zanu PF initiative, decided it was improper to have a Movement for
Democratic Change (MDC) member heading the committee. Zvidzayi belongs to
Morgan Tsvangirai's faction of the MDC.

A government official
speaking on condition he was not identified, said following the objections
by Zanu PF officials, the MDC mayor was then made the deputy chairperson of
the committee while Gweru businessperson, Enos Size was appointed the
chairperson of the committee.

However, the committee is still to
meet.

Asked for comment, the Midlands provincial medical director,
Anderson Chimusoro, referred all questions to the Midlands governor who was
not immediately available for comment yesterday.

However, Zvidzayi
told The Standard that he was willing to direct all his energies to the
project despite disagreements over his involvement.

"Unfortunately I
cannot say much regarding the committee but I want to emphasise that I am
ready and willing to work for the improvement of the mortuary and on
anything else that benefits our residents," Zvidzayi said.

The Gweru
provincial hospital mortuary has a capacity of 24 bodies but has over 60
bodies at any given time.

Waking up to ex-Zim army cash heist gangs

Police forces in Southern
Africa are waking up to a new threat: gangs of disciplined, well-armed
former Zimbabwean soldiers involved in high-value
robberies.

South Africa has borne the brunt of a spree
of organised raids on isolated casinos and cash-in-transit vans, reportedly
conducted efficiently and with minimum violence.

"We only woke
up to the fact that we could be facing seasoned soldiers when we arrested a
cash-in-transit gang in the West Rand in late 2004. Many of them turned out
to be ex-soldiers, and thereafter similar catches were made in connection
with casino hits in Limpopo and KwaZulu-Natal [provinces]," said a senior
detective in the Serious and Violent Crimes Unit, who asked not to be
named.

Senior detectives in Polokwane, in Limpopo province on the
border with Zimbabwe, told IRIN that investigations into a string of
robberies were ongoing, but well-planned attacks on remote casinos in the
province late last year were the work of a gang with 15 to 20 members
carrying AK-47 assault rifles - the standard weapon of the Zimbabwean police
and army.

"These people bring all they need ... [provide their own]
transport, always strike at the right time, and will get away without firing
a single shot if not challenged. Once they leave the crime scene, they
disappear into thin air, which is why we think we are dealing with a gang
that comes occasionally to strike it big, and goes back [home] to spend,"
said the detective.

Members of the Zimbabwe National Army (ZNA)
IRIN spoke to said they were not surprised that serving and retired soldiers
were involved in armed robbery, and pointed to an erosion of discipline in
the armed forces as a result of worsening service conditions.

"It is true that some of these people are now part of the spiralling crime
wave in South Africa, but they are not an organised syndicate. These are
small groups who go in to make a raid and quickly dash back," said one
officer.

"The low pay, low morale and the fact that juniors
have been watching [senior] officers feathering their nests illegally since
the DRC [Democratic Republic of Congo] conflict has contributed in a big way
to crime in the service. So we now have retired and serving members who form
themselves into groups that go around robbing," he remarked.

Shadow defence minister of the opposition Movement for Democratic Change,
Job Sikhala, who sits on the parliamentary portfolio for defence, said there
was no doubt that elements of the security forces were involved in armed
robberies in the region.

"Those allegations are true. Even at home
the uniformed forces are increasingly turning to violent, often armed crimes
that use state-supplied firearms. However, we do not have any cases of
serving officers being arrested or suspected, so we believe this could be
the work of deserters or retired personnel," Sikhala told IRIN.

The ZNA public relations department said it could not comment until it had
investigated the allegations.

An average trooper earns US $100 a
month, but household expenditure for the average family is US $353, and
rising.

'Apartheid' fence riles students

The National University of Science and Technology
(NUST) has erected a security fence in order to bar students who have not
paid new fees from attending lectures.

Disgruntled students say
the fence is a throw back to the apartheid era in pre-democratic South
Africa, when blacks were barred from designated areas.

University authorities have also pitched a huge tent near the security
fence. The tent is used as a banking hall for students settling their
outstanding fees before they can enter the campus.

Paid up
students are issued with new identity cards that have to be produced upon
entering the security fence.

NUST had given its students until 27
March to settle the fees, increased to $30 million up from $3 million a
semester.

Student Representative Council (SRC) president, Beloved
Chiweshe, said the SRC was making frantic efforts to contest the move by the
authorities in the courts.

"We are against the barring of
students from entering the campus on the basis that they have not paid their
fees. It is a waste of resources. We will confront that by going to the
courts because we cannot be denied education," Chiweshe said.

Chiweshe was on Tuesday, with 27 other students, hauled before a
disciplinary hearing for protesting against the new fees and also
"unlawfully and intentionally... demonising and castigating the government
and the Vice Chancellor of NUST".

Contacted for comment, the
Director of Information and Public Relations, Felix Moyo, defended the
"apartheid" fence saying "it is not something new and the tent is designed
to provide a shade for the students."

Moyo said: "In fact, in other
universities world-wide, students swipe their identity cards before entering
the campus. We pitched the tent so that students can be protected say if
there is a blazing sun or if it's raining."

However, the secretary
general of the Progressive Teachers' Union of Zimbabwe, Raymond Majongwe,
urged NUST students to "bring down these walls and cut the fences of
injustice".

He said: "It is a violation of the Universal
Declaration of Human Rights (1948: Article 26) because it says that everyone
has a right to education. The nature of creating zones as if we are in the
Ian Smith era is a negation of fundamental human rights. Students must
confront that system," Majongwe said.

The Minister of Higher
and Tertiary Education, Stan Mudenge, told Parliament last Thursday that
tertiary institutions should not deny students access to universities and
colleges on the basis of having failed to settle the newly introduced
tuition fees. His appeal seems to be falling on deaf ears.

Meanwhile authorities at the Harare Polytechnic continue to bar students who
failed to top up their fees from eating at the institution's
canteens.

Sources at the college last week said the authorities
have however, stopped evicting students that have not paid up their
accommodation fees.

But the college is not accepting examination
fees from students who have not paid up their tuition fees. Tuition fees
were increased from $2.7 million to $14.4 million more than a month
ago.

The suspended students' representative leader, Stephen
Matenga, said: "As student leaders we applaud the government's temporary
reprieve. But there is need for a permanent solution. Fee increments must be
realistic and affordable. It must be sensitive to the plight of parents who
are already languishing in poverty."

College Principal, Steven
Raza, declined to give details. "I don't want to talk to you people from The
Standard because you just write whatever you want," he said before switching
off his mobile phone.signed to provide a shade for the
students".

Moyo said: "In fact, in other universities world-wide,
students swipe their identity cards before entering the campus. We pitched
the tent so that students can be protected, say if there is a blazing sun or
if it's raining."

However, the secretary general of the
Progressive Teachers' Union of Zimbabwe, Raymond Majongwe, urged NUST
students to "bring down these walls and cut the fences of
injustice".

He said: "It is a violation of the Universal
Declaration of Human Rights (1948: Article 26) because it says that everyone
has a right to education. The nature of creating zones as if we are in the
Ian Smith era is a negation of fundamental human rights. Students must
confront that system," Majongwe said.

The Minister of Higher
and Tertiary Education, Stan Mudenge, told Parliament last Thursday that
tertiary institutions should not deny students access to universities and
colleges on the basis of having failed to settle the newly introduced
tuition fees. His appeal seems to be falling on deaf ears.

Meanwhile authorities at the Harare Polytechnic continue to bar students who
failed to top up their fees from eating at the institution's
canteens.

Sources at the college last week said the authorities
have however stopped evicting students that have not paid up their
new

But the college is not accepting examination fees from students
who have not paid their new tuition fees. Tuition fees were increased from
$2.7 million to $14.4 million more than a month ago.

The
suspended students' representative leader, Stephen Matenga, said: "As
student leaders we applaud the government's temporary reprieve. But there is
need for a permanent solution."

AirZim to buy five
planes

From The Daily Mirror, 7 April

Daily Mirror Reporter

National air carrier, Air
Zimbabwe (AirZim), intends to buy five new planes to boost its fleet as part
of its turnaround programme, acting chief executive Oscar Madombwe told
Parliament yesterday. Giving evidence to the Parliamentary Portfolio
Committee on Mines, Environment and Tourism, Madombwe said the initial stage
of boosting the parastatal's ageing fleet had already seen the acquisition
of three MA60 planes from China. "We intend to buy two long haul aeroplanes
(767) and two 737 (medium haul) and one cargo plane. The funds would be made
available by the government and Cabinet has already approved the proposals,"
he said. The MA60s were acquired last year and service short routes. The
airline's interim boss acknowledged that Air Zimbabwe was suffering from
negative public perceptions locally and abroad. "The airline is suffering
from negative perceptions from the traveling public, both local and abroad,
on issues to do with safety, reliability and service delivery," Madombwe
said. "A result of all this has been a decline in business. In 1999 we
carried 1 million passengers, but last year it dropped to a mere 230 000. We
are operating in a difficult environment," he said.

Strained
relations between Zimbabwe and Western countries have caused a decline in
airlines flying into Zimbabwe and tourist arrivals. Madombwe explained that
although their current fleet was old, the planes were still safe to use.
"The fleet we operate like the 737s are 30 years old. To the public, 30
years is (very) old. The bigger planes are 15 years old. However, in terms
of usage, they are not old. Our aeroplanes are underutilised, they are doing
three hours a day instead of eight hours," he said. He added they were also
facing problems of foreign currency that had made it difficult for them to
improve the planes' interior decorations. "The little forex we have goes to
maintenance. The interior is old, but it's a luxury. We have to ensure the
planes are safe by buying the spares instead of replacing the old carpets
and so on," Madombwe said, adding US$2 million was needed to improve
in-flight entertainment. He also said fuel problems adversely affected the
airline's reliability. Madombwe said: "We have problems with reliability,
but some of the problems are beyond our reach, for example shortage of Jet A
fuel. We are not in the business of buying fuel." He said the airline had
put in place measures to ameliorate the problem such as refuelling along the
routes they ply.

Flights had also been disrupted by industrial
action and go slows by engineers and pilots, the Air Zimbabwe boss said. "We
also have a problem with our industrial relations. Engineers and pilots are
very critical and they always slow down things when they want to bargain. If
you do not do maintenance on time it also affects flight schedules," he
said, blaming some of the problems bedevilling the airline to the department
of immigration and Zimbabwe Revenue Authority (Zimra). Madombwe also
lamented Air Zimbabwe staff's poor working conditions saying they
contributed to the decline in hospitality. "People are looking after
themselves and business comes second. Zimbabwe's hospitality is no longer
there. We have done some training but, results have not been encouraging at
all," he said. He also said Air Zimbabwe now gives bottled beverages to its
passengers instead of canned drinks due to shortages of the commodity
locally. Madombwe said the airline was using an inferior reservation system,
adding telephone lines to the Harare International Airport were poor.

Shocking systematic
bullying

From The Mail & Guardian (SA), 7 April

Godwin Gandu

Harare - Court proceedings are
brought to a halt in Harare's High Court D where two witnesses, flown in
from Switzerland, are to testify in a murder case. The recording equipment
has malfunctioned and the Justice Ministry is too broke to replace it. The
Swiss ambassador to Zimbabwe, Marcel Stutz, leaves the court and returns
moments later with a cable - for which he paid R15 - so that the case can
proceed. This sorry tale is indicative of the dire state of Zimbabwe's
courts. But it is not just cables and poor lighting that are a problem;
state agents and the police stand accused of bullying the judiciary,
particularly in politically sensitive cases. "Going to courts is now a
formality. Otherwise, cases are determined over a glass of beer or at a
restaurant outside town," a senior law officer at the attorney general's
office told the Mail & Guardian. "So worrying is the situation that
there are few magistrates and police officers with good conscience left in
the system."

An internal document, compiled by the human
resources department of the Justice Ministry states that in 2000 and 2003,
30 magistrates and 50 clerks and interpreters quit. In 2004 and 2005 an
additional 15 magistrates and 21 prosecutors resigned. Last October the
president of the Magistrates' Association of Zimbabwe, Enias Magate, told
the Minister of Justice, Patrick Chinamasa, that poorly paid magistrates
were "resorting to taking bribes". It is not uncommon for magistrates to be
seen hitchhiking to work or jostling for seats on a bus with people that
will appear before them on that day. With a salary of R1 200 a month and
constant intimidation by police, magistrates are prone to corruption.
Attorney General Sobuza Gula-Ndebele last month alerted President Robert
Mugabe of these "deplorable unbecoming conducts", in his regular briefing to
the head of state. Gula-Ndebele, a war veteran himself, has signalled his
intention to tackle the politicians head-on. An official in the auditor
general's office said: "He told us to report any politician harassing us. I
think there is a limit to what he can do."

Just recently, in the
eastern city of Mutare, about 250km from Harare, provincial area prosecutor
Levison Chikafu had to flee his home after a heated debate with state agents
over the handling of the arms cache discovered at the property of arms
dealer Mike Hitschmann. Auditor-general officials Joseph Jagada and Florence
Ziyambi also had to beat a hasty retreat to Harare. According to sources in
the office, "state agents wanted to direct the prosecution" and did not take
kindly to "varying and glaring loopholes pointed out to them". The police,
they say, "are never thorough when they conduct investigations" and their
"dockets collapse" when the case is taken to court. In his ruling, High
Court Judge Charles Hungwe, on circuit in Mutare, blasted the "shocking,
systematic bullying and intimidation of the prosecution by state agents .
the behaviour deserves the highest possible censure".

In August
2002, magistrate Walter Chikwanha was beaten up in Chipinge, sustaining
broken ribs and a fractured collarbone. He was dragged from his courtroom by
a group of war veterans in full view of the police after he dismissed an
application by the state to remand in custody five opposition officials. In
2001 in Bindura, Mashonaland central province, war veterans accosted
magistrate Munamato Mutevedzi for ordering the arrest of Zanu PF supporters.
He has since been transferred to another province. Prosecutors who spoke to
the M&G also complained that the Attorney General's Bill that sought to
establish an independent office with its own finances has yet to be
implemented, despite having passed through Parliament and Cabinet. "The
president himself approved it. Why it's not being approved four years on is
baffling," a prosecutor lamented. The Bill is also intended to usher in
market-related salaries of R6 000 a month for prosecutors. "There is a
feeling in government that we are incompetent hence no need for more
salaries or approval of the Bill," he said.

Independence protest: Toronto

The Movement for
Democratic Change of Zimbabwe, Canada Province, along with its sister
Diaspora Provinces in the UK, USA, South Africa, Australia and New Zealand,
launches its first ever peaceful protest in Toronto, Canada, on the 15th
April 2006 a few days before Zimbabwe's Independence Day celebrations due
18th April, 2006. The protest starts at noon and the registered venue is
Nathan Phillips Square on the City Hall grounds, Toronto
City.

3. Intervention of the UN, EU, AU, the Commonwealth, and
the Church to:

(a) Policing of the elections;

(b) Verifying
of the voter's roll;

(c) Peacekeeping well before, during and after
elections for a reasonable time period.

4. A people-driven
Constitutional reform.

5. Voting as a must by all citizens including
those in the Diaspora.

6. The Honourable Prime Minister Stephen
Harper, and the Governor-General Her Excellence Jean demand action from the
United Nations, Commonwealth, European Union and the African Union on
immediate solutions.

United prayer time for the nation

"If my
people who are called by my name will humble themselves and pray and seek my
face and turn from their sin the I will hear... and will heal their land"
2Chronicles 7: 14

Tuesday, April 18, 2006 Independence
Day

North America Toll Free 888 387 8686

International
Tel: # 303 928 3281

Conference I.D #
7434952

TIMES:

Pacific time: 1100

Eastern Time:
1400

London: 0700

Australia 1600

South Africa
0800

Please join us as we humble ourselves with one accord in a
unique/innovative prayer service to God as we petition the Highest Throne in
the universe to hear our cry as a result the SUFFERING in Zimbabwe. Confirm
your attendance in advance where possible by e-mailing us at surehope7@yahoo.com Inquiries call Susan
Roberts @ phone # 604 521 1855

"God will do nothing except in answer to
prayer". "Prayer changes things".

Long distance call charges will apply
if you are calling from outside Canada/USA

Corruption has taken root: Mugwadi

CHIEF immigration officer,
Elasto Mugwadi, yesterday said corruption that has taken root at the
country's points of entry were largely due to poor remuneration and working
conditions.

Mugwadi said the situation was unlikely to improve if
immigration officials' remuneration remained unchanged.He said this when
he appeared before the Parliamentary Portfolio Committee on Mines,
Environment and Tourism."The officers get to be corrupted. Look at the
paltry salaries the officers are getting. They can't afford to travel to
work and feed their families.We urge you as a committee to talk to our
employers to improve our conditions of service," he said.Mugwadi said
under-invoicing and receipting were the common acts of corruption at the
border posts."It almost like corruption has been institutionalised. We never
sit back when a case is reported. Several officers have been found on the
wrong side of the law and arrested," he added.Mugwadi, however, refuted
allegations that his department was responsible for the delays at border
pos, especially at Beitbridge saying the public were ignorant of the fact
there were many departments that work at the points of entry."We try to
operate on same international standards as applicable elsewhere. We want to
clear people in three minutes of arrival at the border. However, it also has
to be understood that you do not leave the border unless cleared by Zimra
(Zimbabwe Revenue Authority).Some encounter delays because Zimra has to go
through their bags searching, but when it is asked people will say it's (the
delay) because of immigration officials instead of Zimra," said
Mugwadi.Most travellers spend days at border posts as they wait to be
cleared and this has been blamed for the decline in business as people avoid
passing through Zimbabwe.The country has lost out millions of dollars in
revenue as a result.Mugwadi added that his department was in the process of
designating entry points for residents from the Sadc and Comesa regions and
other important people to expedite immigration processes